Re: Brands that get caught up in the culture wars don't know themselves-or their customers

On 20 Dec 2021, Rudy Canoza <[email protected]> posted some
news:[email protected]: 

> Budweiser shit on 100 years of customers and they think they can get
> away with it. 

Since March Madness, Bud Light, owned by Anheuser-Busch, has been mired in 
controversy over its partnership with transgender influencer Dylan 
Mulvaney. Usually, social commentary fades after 48 hours. However, Bud 
Light experienced an unexpected escalation of customer rage, amplified by 
influential media, resulting in a boycott that has defied all expectations 
and is now entering an unprecedented third month.

The first rule of crisis management: Stop the bleeding
Nationwide, Bud Light sales have shrunk by more than 25% versus a year ago 
during the week ended May 20. Sales of other Anheuser-Busch brands also 
dropped: Budweiser -11.2%; Michelob Ultra -6.5% and Natural Light -4.9% 
for the same period.

“We’ve never seen such a dramatic shift in national share in such a short 
period of time,” Beer Business Daily commented.

“I’m stunned by how widespread the impact has been felt,” said Beer 
Marketer’s insights editor Benj Steinman. “It tells you that the hit is 
not just red and rural.”

Anheuser-Busch stock fell 18% from Apr. 1 to Jun. 2, losing more than 23 
billion in market capitalization due to the crisis, while the S&P500 was 
up 3.8 % for the same period. The Anheuser-Busch position is particularly 
perilous now as the crucial summer selling season begins.

In what could turn out to be a new major challenge, the U.S. Environmental 
Protection Agency announced this week that Anheuser-Busch agreed to pay 
$537,000 to settle allegations it failed to comply with chemical accident 
prevention regulations and will improve safety operations at 11 of its 
flagship breweries that use anhydrous ammonia, which is dangerous to the 
skin, eyes, and lungs.

‘The difference between mere management and leadership is communication’ 
–Winston Churchill
The digital world has become omnipresent. Yet, many corporate cultures, 
boards, executives, and advisors have not adapted to the immediate nature 
of its impact.

Evidently, corporate leaders have not learned about the speed and 
magnitude of social media from the Silicon Valley Bank disaster, the 
modern-day bank run that was accelerated by instant digital commentary. In 
a single day, customers withdrew $42 billion.

While these disasters are not equivalent, in the middle of a crisis, 
Anheuser-Busch seemed to have little understanding of the internet’s 
instant influence, probably due to executive hubris and minimal 
communication with customers.

CEOs and boards must fully embrace their company’s public stance. They 
must exude authority, accountability, leadership, and confidence as they 
guide the company’s public image with unwavering resolve.

Instead, Bud Light issued an ineffective statement four days after the 
blowback from the campaign began. And it took Anheuser-Busch CEO Brendan 
Whitworth almost two weeks to issue an indecisive apology.

Part of the fury was undoubtedly triggered by management’s failure to take 
ownership of the campaign–or alternatively, address customer concerns over 
the sponsorship.

‘If you know neither the enemy nor yourself, you will succumb in every 
battle’ –Sun Tzu
Since March, no matter which CEO or board I speak with about crisis or 
reputation, the Bud Light disaster monopolizes the discussion.

What insights did other CEOs gain from this prolonged Bud Light uproar? 
Apparently, not much. Brands like Maybelline and Target have faced a 
similar backlash on social media.

It was utterly surprising that Target CEO Brian Cornell took a somewhat 
analogous approach to Bud Light during the ongoing crisis. Target stock 
was down 15% and lost more than $11 billion in market capitalization from 
May 1 to June 2, slipping to the lowest level since 2020, while the S&P 
was up 3% for the same period. It’s almost a living case study of what not 
to do.

In highly polarized times, no matter the cultural or political issue, 
broadly, 45% support you, 45% are against you, and about 10% are 
undecided. The harshness and pushback depend on the gravity of the 
subject, how poorly or soundly the company manages the crisis, and how 
undecided lean.

So, why would any CEO take action to instantly alienate half of their 
customers, employees, investors, and other constituents?

It is not that companies should be quiet on issues, but as my dad always 
said,” Understand all the circumstances, players, timing, and 
dynamics–then pick your fights.”

Nike has a history of taking a stand on social issues. In 2018, Nike took 
a risk. However, they understood their customer base, largely millennials 
and Gen Zers who want brands to be vocal on social issues.

Nike’s “Dream Crazy” ads featured Colin Kaepernick, former NFL quarterback 
turned civil rights activist. While Nike managed the aftermath quite well, 
experiencing increased sneaker sales, the campaign’s success is also 
attributed to the inclusion of LeBron James, Serena Williams, and Shaquem 
Griffin.

However, when later the company contradicted its messaging, it resulted in 
negative commentary. In May 2019, six-time Olympic gold medal sprinter 
Allyson Felix, criticized Nike for its treatment of pregnant female 
athletes. Nike changed its policy after Felix’s comments went viral and 
ensured that pregnancy would not result in financial penalties for female 
athletes.

Good news happens over time. Bad news is instant and overwhelming
To avoid brand devastation, top executives must keep oversight of brand 
and social content. When faced with a thorny issue, they must listen to 
all sides of the argument. Campaigns must be reviewed by non-conflicted 
public relations professionals who can foresee possible news coverage and 
how the campaign will be received by customers, investors, employees, and 
other stakeholders. It’s also paramount to be well-informed on opposition 
groups and the actions they could potentially take.

Nineteenth-century circus impresario P.T. Barnum, who said “There is no 
such thing as bad publicity,” was wrong–or at least his theory did not 
stand the test of time. In today’s digital media circus, there is such a 
thing as bad publicity.

Richard Torrenzano is the CEO of The Torrenzano Group, which helps 
organizations take control of how they are perceived. For nearly a decade, 
Richard was a member of the New York Stock Exchange Management (policy) 
and Executive (operations) Committees. Richard is a sought-after expert in 
leading commentator on financial markets, brands, crisis, media, and 
reputation.

https://fortune.com/2023/06/07/brands-caught-up-iculture-wars-retail-
customers-internet-richard-torrenzano/?queryly=related_article